Looks like Fiat is moving on up, because the Italian automaker has reportedly inked a deal with Daimler that would see Fiat producing the next-generation Mercedes-Benz A-Class and B-Class compact cars. This is in addition the partnership already forged between the two firms wherein Fiat would manufacture truck engines to Daimler, a deal worth $3.49 billion.

Sergio Marchionne, chief executive at Fiat, says that this deal is still in the works, but they “could enter” into an extended partnership with Daimler. “We’re not just talking with Daimler about engines,” said Marchionne. “We’re talking about everything.” How much further this partnership can go remains to be seen. I wonder if the reverse could come to pass with Daimler perhaps making some luxury cars under the Fiat marque.

No specific details were revealed about these discussions, but in an age where everyone is partnering with everyone, you’ve got to wonder if Daimler has found its new Chrysler.